Equivalent plans for paid leave

Minnesota Paid Leave provides both medical leave, for an employee's own healthcare needs, and family leave, to care for others. Workers can take up to 12 weeks of family or medical leave in one benefit year, or up to 20 weeks total if they qualify for both types of leave in the same year.

An approved equivalent plan can cover both family and medical leave, or only one leave type. Employers who offer an equivalent plan for only one type of leave must pay premiums and participate in Minnesota Paid Leave to provide coverage for the other type.

Equivalent plans for family or medical leave must meet the following conditions:

1. All employees who are covered under the state plan must be covered under the equivalent plan.
2. Eligibility requirements cannot be stricter than those in the state plan.
3. Weekly payments must be at least equal to those provided by the state plan and separate from other benefits.
4. The total amount of leave available must be at least equal to the amount provided by the state plan.
5. Job protections must be at least equal to those provided by the state plan.
6. Costs to employees cannot be more than what their premiums would be under the state plan.
7. For medical leave, the equivalent plan must cover any serious health condition, or medical care related to pregnancy, that would be covered under the state plan.
8. For family leave, the equivalent plan must cover any care for a family member with a serious health condition, bonding with a child, active duty military service, or any safety leave event that would be covered under the state plan.
9. The equivalent plan must offer intermittent leave or reduced schedules consistent with the state plan.
10. The equivalent plan cannot impose any additional conditions or restrictions on the use of leave beyond those in the state plan.
11. Coverage must continue for 26 weeks after employee separation, or until the individual is hired by a new employer.
12. If a leave application is filed by a former employee, the equivalent plan must pay benefits for the full time of leave. Equivalent plans may not cut off eligibility for a former employee during an approved leave.

As an employer, you should consider whether you want to meet the requirements of Paid Leave through the state plan, an insurance carrier plan, or a self-insured plan. You can use our calculator to estimate employer and employee costs under Minnesota Paid Leave.

For employers who want to offer an equivalent plan, the Paid Leave division is building a straightforward, user-friendly application where you can submit a request in the coming months.

Paid Leave is working with the Minnesota Department of Commerce to certify insurance carrier plans that meet program requirements. This way, employers will have a market of approved plans available if they decide to offer paid leave benefits through an equivalent plan. Certification is underway now and will be offered continuously.

Insurance carriers interested in offering an equivalent plan can find guidance from the Department of Commerce.

Requesting an insurance carrier equivalent plan

You will be able to request an exemption online in coming months. Below are the materials you should gather so you are prepared to make your request.

1. Policy number, plan number, and insurance carrier
2. Insurance policy document
3. Coverage effective dates (must cover one full year)
4. Payment:
   1. A nonrefundable fee of $250, $500, or $1000 will be due depending on employer size
   2. A processing fee that varies based on payment method

If you plan to request a paid leave exemption for multiple entities, Paid Leave staff will be ready to assist when requests open in the coming months.

A self-insured plan is a type of equivalent plan where an employer manages paid leave requests and payments to employees on leave themselves, rather than through an insurance carrier or the state. Employers who want to provide a self-insured equivalent plan need to prove that their plan is equal to or more generous than the state plan. Self-insured plans must also be backed up by a surety bond to guarantee leave payments can be covered.

Surety bond coverage

To set up a surety bond, employers will need to work with a surety company authorized to do business in Minnesota. You will also need to complete a surety bond information form.

The value of the surety bond must be equal to the total annual premiums for your business and workforce under the state plan. Use our Paid Leave calculator to determine your annual premiums.

Requesting a self-insured equivalent plan

You will be able to request an exemption online in coming months. Below are the materials you should gather so you are prepared to make your request.

1. Surety bond information form
2. Plan documentation, which must include the following. Paid Leave will provide a self-insured plan documentation template to help employers gather this information.
   1. Surety bond number
   2. Bond issuer name, email, phone number, and address
   3. Coverage effective dates (must cover one full year)
   4. Plan details showing equivalency to the state program
3. Payment
   1. A nonrefundable fee of $250, $500, or $1000 will be due depending on employer size
   2. A processing fee that varies based on payment method

Additional information will be available in the coming months, including more details about approved insurance carrier plans and how to request an Equivalent Plan Exemption.

Sign up to receive updates from Minnesota Paid Leave.